Investing in Green Enterprises- Is it a Good Idea?

Some considered environmentalism a niche in business, catering to specific demographics. However, over the years we have seen it evolve to something much more than that- it’s a movement that is pushing the economy forward, becoming at minimum a consideration for many industries, especially those governed by standards or regulations.

Along with this infusion of eco-considerations into many industries, this trend has also seen the development of an entire sector of its own, specializing in eco products, eco services, and greening other traditional operations. As these companies and their offerings evolve, it’s time for us to think about how we can take advantage of this shift in the economy.

Here are some reasons that “Green Enterprises” are a good place to invest:

First Movers

If you have had any economic training, you will already know what the “first movers’ advantage” means. We are referring to the positioning advantage that pioneering companies have when they are the first of something on the market. For example, if you are the first person making hand-crafted natural soap, you will have a hard time selling your product since your competitors likely have a more established brand, a more approachable price point and a more understood product. However, once the market starts to shift and more and more natural soaps flood market, the one that was first present has a large advantage as it was the pioneer, is the most established of the bunch, and is known as a thought leader. Later, when the big companies start embracing this shift as consumer will start to expect a more natural product, they will have to spend time and money researching, rebranding, and convincing people that they have changed their ways.

Investing in first movers might not give you immediate financial results, but you have to remember that you are betting on the potential.

Government Support

Many eco-friendly companies are getting support for development thanks to government bursaries and grants targeting green business. Environmentalism has been a huge plank in every politician’s platform in one way or another. This can be great news for an investor, as even companies that would perhaps flounder in normal market conditions will get great traction if they have the right mindset and the increased financial support from the government. Funding is the bloodline for smaller enterprises as month on month cash flow can be tight, especially in areas like product or research development.

Knowing that a company you are investing in has government funding is a kind of insurance for you. Not only did the idea seem sustainable and sound for investing by the government, but there is a smaller chance of failure.

Specialized Advice

It’s true that there are all kinds of investment advisors out there, and some of them even specialize in different industries like services, manufacturing, or high-tech, but no one group is as targeted as the ones involved with green enterprises. You’ll even find that some have sub-specialized and there will be no trouble finding a top financial advisory firm for renewable energy financing, if that’s something you are interested in. This means that companies looking for funding and refinancing opportunities for their green projects have the support they need to thrive and can secure the resources they need to move forward with their plans.

If banks, governments, and private investors are willing to get behind green enterprises, it probably means that it’s a good place for you to stand as well. Green businesses like ones involved sustainability, renewable energy, and environmental protection are supported and protected through the first mover’s principal, governmental political and financial support, as well as specialized financing options and advice.